Skip to main content Accessibility help

Democratization and the Conditional Dynamics of Income Distribution



Despite strong theoretical reasons to expect that democratization equalizes income distributions, existing empirical studies do not find a statistically significant effect of democratization on measures of income inequality. This paper starts from the simple observation that autocracies are heterogeneous and govern quite extreme distributional outcomes (also egalitarian). Democratization may drive extreme income distributions to a “middle ground.” We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using fixed-effects and instrumental variable regressions, we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing effect in highly unequal autocracies. The effect appears to be driven by changes in gross (market) inequality, suggesting that democratization has led, on average, to redistribution of market opportunities, rather than to direct fiscal redistribution. We then investigate which kinds of (heterogeneous) reforms are at work following democratizations that may rationalize our findings.


Corresponding author

*Michael T. Dorsch, Associate Professor, School of Public Policy, Central European University, Budapest, Hungary,
Paul Maarek, Associate Professor, LEMMA, Université Panthéon-Assas (Paris 2), France,


Hide All

We are grateful for the thoughtful comments of seminar audiences at the ETH Zurich, Université de Paris 1 La Sorbonne, the University of Gothenburg, the Stockholm School of Economics (in Stockholm and Riga), the Insper Institute (São Paolo), the University of the State of Rio de Janeiro, and the Political Economy Research Group at Central European University. We also thank participants at the annual meetings of the European Public Choice Society (Freiburg and Budapest), the Network of European Peace Scientists (Milan), the Silvaplana Workshop on Political Economy, the conference on the Political Economy of Democracy and Dictatorship (Münster), and the Journées Louis-André Gérard-Varet (Aix-en-Provence) for helpful comments. In particular, we received comments that improved the paper from Toké Aidt, Rémi Bazillier, Ricardo Ceneviva, Vera Eichenauer, François Facchini, Arye Hillman, Andrew Li, Levente Littvay, Pierre-Guillaume Méon, Rodrigo Moita, and Jan-Egbert Sturm. Four anonymous referees and the editor in charge of our submission provided constructive criticisms that greatly improved the paper. Of course, all remaining errors are our own. Some of this research was carried out while Dorsch was visiting the Institute for Advanced Study at the Université de Cergy-Pontoise and he is grateful for their hospitality and financial support. Replication files are available at the American Political Science Review Dataverse:



Hide All
Acemoglu, Daron, Naidu, Suresh, Restrepo, Pascual, and Robinson, James A.. 2015. “Democracy, Redistribution, and Inequality.” In Handbook of Income Distribution, eds. Atkinson, Anthony B. and Bourguignon, Francois. Amsterdam: Elsevier, 18851966.
Acemoglu, Daron, Naidu, Suresh, Restrepo, Pascual, and Robinson, James A.. Forthcoming. “Democracy Does Cause Growth.” Journal of Political Economy,
Acemoglu, Daron, and Robinson, James A.. 2000. “Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective.” Quarterly Journal of Economics 115 (4): 1167–99.
Acemoglu, Daron, and Robinson, James A.. 2001. “A Theory of Political Transitions.” The American Economic Review 91 (4): 938–63.
Acemoglu, Daron, and Robinson, James A.. 2006. The Economic Origins of Dictatorship and Democracy. New York: Cambridge University Press.
Acemoglu, Daron, and Robinson, James A.. 2008. “Persistence of Power, Elites, and Institutions.” The American Economic Review 98 (1): 267–93.
Acemoglu, Daron, Verdier, Thierry, and Robinson, James A.. 2004. “Kleptocracy and Divide-and-Rule: A Model of Personal Rule.” Journal of the European Economic Association 2 (2–3): 162–92.
Aidt, Toke S., Daunton, Martin, and Dutta, Jayasri. 2010. “The Retrenchment Hypothesis and the Extension of the Franchise in England and Wales.” Economic Journal 120 (547): 9901020.
Aidt, Toke S., Dutta, Jayasri, and Loukoianova, Elena. 2006. “Democracy Comes to Europe: Franchise Extension and Fiscal Outcomes 1830–1938.” European Economic Review 50 (2): 249–83.
Aidt, Toke S., and Jensen, Peter S.. 2009. “The Taxman Tools up: An Event History Study of the Introduction of the Personal Income Tax.” Journal of Public Economics 93 (1): 160–75.
Aidt, Toke S., and Jensen, Peter S.. 2014. “Workers of the World Unite! Franchise Extensions and the Threat of Revolution in Europe, 1820–1938.” European Economic Review 72: 5275.
Ansell, Ben, and Samuels, David. 2010. “Inequality and Democratization: A Contractarian Approach.” Comparative Political Studies 43 (12): 1543–74.
Ansell, Ben W., and Samuels, David J.. 2014. Inequality and Democratization: An Elite Competition Approach. New York: Cambridge University Press.
Arbetman-Rabinowitz, Marina, Fisunoglu, Ali, Kugler, Jacek, Abdollahian, Mark, Johnson, Kristin, Kang, Kyungkook, and Yang, Zining. 2011. “Replication data for: Relative Political Capacity Dataset”,, Harvard Dataverse, v4.
Arellano, Manuel, and Bond, Stephen. 1991. “Some Specification Tests for Panel Data: Monte Carlo Evidence and an Application to Employment Equations.” The Review of Economic Studies 58 (2): 277–98.
Besley, Timothy, and Kudamatsu, Masayuki. 2006. “Health and Democracy.” The American Economic Review 96 (2): 313–18.
Bloom, David E., Canning, David, and Sevilla, Jaypee. 2004. “The Effect of Health on Economic Growth: A Production Function Approach.” World Development 32 (1): 113.
Blundell, Richard, and Bond, Stephen. 1998. “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models.” Journal of Econometrics 87 (1): 115–43.
Boix, Carles. 2003. Democracy and Redistribution. New York: Cambridge University Press.
Boix, Carles, Miller, Michael, and Rosato, Sebastian. 2012. “A Complete Data Set of Political Regimes, 1800–2007.” Comparative Political Studies 46 (12): 1523–54.
Bruno, Giovanni S. F. 2005. “Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models.” Economics Letters 87 (3): 361–6.
Cheibub, José Antonio, Gandhi, Jennifer, and Vreeland, James Raymond. 2010. “Democracy and Dictatorship Revisited.” Public Choice 143 (1–2): 67101.
Chen, Chao, and Li, Andrew X.. 2018. “Does Democracy Cause Trade Policy Liberalisation? Unpacking the Black Box of Trade Policy.” Journal of International Relations and Development 21 (4): 1014–37.
Conley, Timothy G., Hansen, Christian B., and Rossi, Peter E.. 2012. “Plausibly Exogenous.” The Review of Economics and Statistics 94 (1): 260–72.
Coughlin, Peter J. 1992. Probabilistic Voting Theory. New York: Cambridge University Press.
De Haan, Jakob, and Sturm, Jan-Egbert. 2003. “Does More Democracy Lead to Greater Economic Freedom? New Evidence for Developing Countries.” European Journal of Political Economy 19 (3): 547–63.
De Haan, Jakob, and Sturm, Jan-Egbert. 2017. “Finance and Income Inequality: A Review and New Evidence.” European Journal of Political Economy 50: 171–95.
De Long, J. Bradford, and Shleifer, Andrei. 1993. “Princes and Merchants: European City Growth before the Industrial Revolution.” The Journal of Law and Economics 36 (3): 671702.
De Luca, Giacomo, Litina, Anastasia, and Sekeris, Petros G.. 2015. “Growth-Friendly Dictatorships.” Journal of Comparative Economics 43 (1): 98111.
De Mesquita, Bruce Bueno, Smith, Alastair, Morrow, James D., and Siverson, Randolph M.. 2003. The Logic of Political Survival. Cambridge: MIT Press.
Djankov, Simeon, La Porta, Rafael, Lopez-De-Silanes, Florencio, and Shleifer, Andrei. 2002. “The Regulation of Entry.” Quarterly Journal of Economics 117 (1): 137.
Dorsch, Michael T., Dunz, Karl, and Maarek, Paul. 2016. “Development and Inefficient Regulation under the Threat of Revolution.” Journal of Comparative Economics 44 (4): 1040–54.
Dorsch, Michael T., and Maarek, Paul. 2015. “Inefficient Predation and Political Transitions.” European Journal of Political Economy 37: 3748.
Dunn, Olive Jean. 1961. “Multiple Comparisons Among Means.” Journal of the American Statistical Association 56 (293): 5264.
Feenstra, Robert C., Inklaar, Robert, and Timmer, Marcel P.. 2015. “The Next Generation of the Penn World Table.” The American Economic Review 105 (10), 3150–82.
Fidrmuc, Jan. 2003. “Economic Reform, Democracy and Growth During Post-Communist Transition.” European Journal of Political Economy 19 (3): 583604.
Freedom House. 2013. Freedom of the World and Freedom of the Press. Washington D.C.
Freeman, John, and Quinn, Dennis. 2012. “The Economic Origins of Democracy Reconsidered.” American Political Science Review 106 (1): 5880.
Galbraith, James K. 2010. “Inequality and Economic and Political Change: A Comparative Perspective.” Cambridge Journal of Regions, Economy and Society 4 (1): 1327.
Gehlbach, Scott, and Keefer, Philip. 2011. “Investment without Democracy: Ruling-Party Institutionalization and Credible Commitment in Autocracies.” Journal of Comparative Economics 39 (2): 123–39.
Gradstein, Mark, and Milanovic, Branko. 2004. “Does Liberté = Égalité? A Survey of the Empirical Links Between Democracy and Inequality with Some Evidence on the Transition Economies.” Journal of Economic Surveys 18 (4): 515–37.
Gründler, Klaus, and Krieger, Tommy. 2016. “Democracy and Growth: Evidence from a Machine Learning Indicator.” European Journal of Political Economy 45: 85107.
Hadenius, Axel, and Teorell, Jan. 2007. “Pathways from Authoritarianism.” Journal of Democracy 18: 143–56.
Haggard, Stephan, and Kaufman, Robert R.. 2012. “Inequality and Regime Change: Democratic Transitions and the Stability of Democratic Rule.” American Political Science Review 106 (3): 495516.
Henderson, David R., McNab, Robert M., and Rózsás, Tamás. 2005. “The Hidden Inequality in Socialism.” Independent Review 9 (3): 389412.
Hollyer, James R., Rosendorff, B. Peter, and Vreeland, James Raymond. 2014. “Measuring Transparency.” Political Analysis 22 (4): 413–34.
Hollyer, James R., Rosendorff, B. Peter, and Vreeland, James Raymond. 2015. “Transparency, Protest, and Autocratic Instability.” American Political Science Review 109 (4): 764–84.
Houle, Christian. 2009. “Inequality and Democracy: Why Inequality Harms Consolidation but Does Not Affect Democratization.” World Politics 61 (4): 589622.
Huntington, Samuel P. 1993. The Third Wave: Democratization in the Late Twentieth Century. Vol. 4. Norman: University of Oklahoma Press.
Jackson, Stephanie L., Vann, William F. Jr., Kotch, Jonathan B., Pahel, Bhavna T., and Lee, Jessica Y.. 2011. “Impact of Poor Oral Health on Children’s School Attendance and Performance.” American Journal of Public Health 101 (10): 1900–6.
Jayachandran, Seema, and Lleras-Muney, Adriana. 2009. “Life Expectancy and Human Capital Investments: Evidence from Maternal Mortality Declines.” Quarterly Journal of Economics 124 (1): 349–97.
Jones, Benjamin F., and Olken, Benjamin A.. 2005. “Do Leaders Matter? National Leadership and Growth Since World War II.” Quarterly Journal of Economics 120 (3): 835–64.
Judson, Ruth A., and Owen, Ann L.. 1999. “Estimating Dynamic Panel Data Models: A Guide for Macroeconomists.” Economics Letters 65 (1): 915.
Kaufman, Robert R. 2009. “The Political Effects of Inequality in Latin America: Some Inconvenient Facts.” Comparative Politics 41 (3): 359–79.
Keefer, Philip. 2009. “Inequality, Collective Action, and Democratization.” PS: Political Science & Politics 42 (4): 661–6.
Knutsen, Carl Henrik. 2015. “Reinvestigating the Reciprocal Relationship Between Democracy and Income Inequality.” Review of Economics & Institutions/Economia, Societa e Istituzioni 6 (2): 137.
Knutsen, Carl Henrik, and Wegmann, Simone. 2016. “Is Democracy about Redistribution?Democratization 23 (1): 164–92.
Kudamatsu, Masayuki. 2012. “Has Democratization Reduced Infant Mortality in Sub-Saharan Africa? Evidence from Micro Data.” Journal of the European Economic Association 10 (6): 1294–317.
Kuznets, Simon. 1955. “Economic Growth and Income Inequality.” The American Economic Review 45 (1): 128.
Larsson-Seim, Anna, and Parente, Stephen L.. 2013. “Democracy as a Middle Ground: A Unified Theory of Development and Political Regimes.” European Economic Review 64: 3556.
Lindbeck, Assar, and Weibull, Jörgen W.. 1987. “Balanced-Budget Redistribution as the Outcome of Political Competition.” Public Choice 52 (3): 273–97.
Lipset, Seymour. 1959. “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.” American Political Science Review 53: 69105.
Lizzeri, Alessandro, and Persico, Nicola. 2004. “Why Did the Elites Extend the Suffrage? Democracy and the Scope of Government, with an Application to Britain’s ‘age of Reform’.” Quarterly Journal of Economics 119 (2): 707–65.
Llavador, Humberto, and Oxoby, Robert J.. 2005. “Partisan Competition, Growth, and the Franchise”. Quarterly Journal of Economics 120 (3): 1155–89.
Madsen, Jakob B., Raschky, Paul A., and Skali, Ahmed. 2015. “Does Democracy Drive Income in the World, 1500–2000?European Economic Review 78: 175–95.
Marshall, Monty, Jaggers, Keith, and Gurr, Ted. 2010. Polity IV Project: Dataset Users’ Manual. Arlington: Center for Systemic Peace.
Meltzer, Allan H., and Richard, Scott F.. 1981. “A Rational Theory of the Size of Government.” Journal of Political Economy 89: 914–27.
Méon, Pierre-Guillaume, and Sekkat, Khalid. 2016. “A Time to Throw Stones, a Time to Reap: How Long Does it Take for Democratic Transitions to Improve Institutional Outcomes?” CEB Working Paper N. 16/016.
Mulligan, Casey, Gil, Ricard, and Sala-i Martin, Xavier. 2004. “Do Democracies Have Different Public Policies than Non-Democracies?The Journal of Economic Perspectives 18 (1): 5174.
Nickell, Stephen. 1981. “Biases in Dynamic Models with Fixed Effects.” Econometrica 49: 1417–26.
Olson, Mancur. 1993. “Dictatorship, Democracy, and Development.” American Political Science Review 87 (3): 567–76.
Papaioannou, Elias, and Siourounis, Gregorios. (2008a). “Democratization and Growth.” Economic Journal 118 (532): 1520–51.
Papaioannou, Elias, and Siourounis, Gregorios. (2008b). “Economic and Social Factors Driving the Third Wave of Democratization.” Journal of Comparative Economics 36 (3): 365–87.
Perotti, Roberto. 1996. “Growth, Income Distribution, and Democracy: What the Data Say.” Journal of Economic Growth 1 (2): 149–87.
Persson, Torsten, and Tabellini, Guido. 2009. “Democratic Capital: The Nexus of Political and Economic Change.” American Economic Journal: Macroeconomics 1 (2): 88126.
Piketty, Thomas. 2013. Le Capital au XXIe Siècle. Paris: Le Seuil.
Riker, William H. 1962. The Theory of Political Coalitions. New Haven: Yale University Press.
Roberts, Kevin W. S. 1977. “Voting over Income Tax Schedules.” Journal of Public Economics 8 (3): 329–40.
Rode, Martin, and Gwartney, James. 2012. “Does Democratization Facilitate Economic Liberalization?European Journal of Political Economy 28: 607–19.
Romer, Thomas. 1975. “Individual Welfare, Majority Voting, and the Properties of a Linear Income Tax.” Journal of Public Economics 4 (2): 163–85.
Ross, Michael. 2006. “Is Democracy Good for the Poor?American Journal of Political Science 50 (4): 860–74.
Solt, Frederick. 2009. “Standardizing the World Income Inequality Database.” Social Science Quarterly 90 (2): 231–42.
Solt, Frederick. 2016. “The Standardized World Income Inequality Database.” Social Science Quarterly 97 (5): 1267–81.
Svolik, Milan W. 2012. The Politics of Authoritarian Rule. New York: Cambridge University Press.
Teorell, Jan, Charron, Nicholas, Dahlberg, Stefan, Holmberg, Soren, Rothstein, Bo, Sundin, Petrus, and Svensson, Richard. 2013. The Quality of Government Dataset, Version 20Dec13. Gothenburg: The Quality of Government Institute.
Themnér, Lotta, and Wallensteen, Peter. 2013. “Armed Conflicts, 1946–2012.” Journal of Peace Research 50 (4): 509–21.
Wilson, Matthew Charles, and Wright, Joseph. 2017. “Autocratic Legislatures and Expropriation Risk.” British Journal of Political Science 47 (1): 117.
Wintrobe, Ronald. 1998. The Political Economy of Dictatorship. New York: Cambridge University Press.
Wooldridge, Jeffrey M. 2010. Econometric Analysis of Cross Section and Panel Data. Cambridge: MIT Press.
Wright, Joseph. 2008. “Do Authoritarian Institutions Constrain? How Legislatures Affect Economic Growth and Investment.” American Journal of Political Science 52 (2): 322–43.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
Type Description Title
Supplementary materials

Dorsch and Maarek Dataset

Supplementary materials

Dorsch and Maarek supplementary material
Online Appendix

 PDF (305 KB)
305 KB


Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed